S.E.B.I. versus SAHARA INDIA REAL ESTATE CORPORATION LTD. & ORS.

Citation: [2014] 13 S.C.R. 1011 · Decided: 04-06-2014 · Supreme Court of India · Bench: T.S. THAKUR · Disposal: Disposed off
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Judgment (excerpt)

[2014] 13 S.C.R. 1011 
S.E.B.I. 
V. 
SAHARA INDIA REAL ESTATE CORPORATION LTD. & ORS. 
(I.A. Nos. 101-103) 
in 
Contempt Petitions (C) No. 412-413 of2012 
in 
Civil Appeals No. 9813 and 9833 of 2011 
and 
Contempt Petition (C) No. 260 of 2013 
in 
CivilAppeal No. 8643 of2012 
JUNE 04, 2014 
[T. S. THAKUR AND A. K. SIKRI, JJ.] 
Scams - Investor-fraud case - Invitation/collection of 
deposits from general public in the form of 'Optional Fully 
Convertible Debentures'-OFCD by a Company- Complaint 
by investors' group - Direction by SEBI to the Company not 
A 
B 
c 
D 
to offer equity shares/OF CDS or any other securities to public 
or invite subscriptions - In appeal, the High Court issuing E 
further directions to the promoter and the directors of the 
Company to jointly and severely refund the amount collected 
alongwith interest @ 15% p.a. - Pursuant thereto orders 
passed by SEBI, tribunal and this Court as regards refund of 
amount as also extension of time period for making refund -
F 
However, non compliance with the directions - Contempt 
petitions against the contemnors - Various orders passed -
Interim applications by contemnors praying that restraint on 
sale and transfer of properties of the Company be lifted- In 
the course of proceedings, contemnors committed to judicial G 
custody - Subsequently, on the prayer of the contemnors · 
seeking bail, conditional order granting interim bail to 
contemnors passed by this Court, condition being to deposit 
Rs. 10, 0001- crores - Non-compliance of the condition -
Aggrieved, promoter filing writ petition, challenging the order H 
1011 
1012 
SUPREME COURT REPORTS 
[2014] 13 S.C.R. 
A whereby contemnor was committed to judicial custody; and 
also seeking release from custody- Dismissal of writ petition 
by this Court- Held: In view of the dilatory tactics adopted by 
the contemnors to delay the proceedings before SEBI, High 
Court and this Court, and non-compliance of the orders 
B passed despite sufficient opportunities the terms stipulated 
in the order granting interim bail to the contemnors cannot 
be modified- Contemnors cannot be shifted to a guest house 
for continued custody and detention - However, orders 
passed by this Court and by SEBI restraining sale and 
c transfer of moveable and immoveable properties held by the 
Company modified- In view of the importance of the issues 
and the fact that a three judge bench matter is sought to be 
enforced in these proceedings, said proceedings referred to 
three-Judge Bench - Reference to larger Bench. 
D 
'SIRECL' company and SHICL 'company' invited/ 
collected deposits from general public in the form of 
'Optional Fully Convertible Debentures' OFCD. On a 
complaint by professional investors' group, SEBI found 
that the mobilisation of funds under the Red Herring 
E Prospectus issued by the two companies was not legally 
permissible and issued directions to the company not 
to offer their equity shares/OFCDS or any other 
securities to the public or invite subscription. The High 
Court upheld the said directions and further directed the 
F promoter and the Directors of the Company to jointly and 
severely refund the amount collected by them alongwith 
interest@ 15% p.a. from the date of the receipt of the 
deposits till the date of such repayment. SEBI directed 
that the company would not access the security market 
G for raising funds till the time the payments are not made. 
In appeal, the tribunal upheld the order passed by the 
SEBI and directed the company to refund the amount 
collected from the investors. Thereafter, this Court 
extended the period for making the refund and directed 
the company to deposit the amount with the SEBI. The 
H company did not comply with directions. Pursuant to the 
S.E.B.I. v. SAHARAINDIAREALESTATE CORPN. LTD. 
1013 
_ order by this Court, the company deposited Rs.5120/-
A 
crores with the SEBI but failed to pay the remaining 
amount. SEBI then filed contempt petitions against the 
contemnors for non-compliance of the directions of this 
Court. Various orders were passed from time to time. 
Instant applications were filed in these contempt 8 
petitions seeking lifting of restraint on sale and transfer 
of properties of the Company. In the course of 
proceedings in contempt petitions, since the directions 
of this Court were not complied with, non-bailable 
warrants were issued against the promoter for his C 
production before this Court and subsequently, the three 
contemnors i
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